business

May 31, 2019

METRO REPORTER

7 min read

Angry wool farmers insult LWC

Angry wool farmers insult LWC

Wool and mohair

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. . . also accuse bank of helping broker defraud them. Wool and mohair farmers almost exchanged blows with Lesotho Wool Centre (LWC) staff during a meeting in Mokhotlong over delayed payments. As Manama Letsie, spokesperson of the LWC, tried to explain why some farmers have not been paid while others have been underpaid, some farmers lost their cool and started hurling insults at him telling him he “is a liar.” They further accused him of enriching himself with their hard earned money.

Although security was tight with heavily armed police officers and soldiers, farmers seemed not to care but kept on interrupting, demanding that Letsie pay back their money. However, police officers tried their best to control the situation and even went out of their way to accompany LWC staff from the small town to their safety. Almost every farmer was armed, which security forces saw as a threat to the lives of those who attended the meeting, including the farmers themselves who were obviously divided about whether or not LWC was the right broker for their long-time business, which has been the backbone of the country's economy, especially the highlands districts.

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The commotion erupted when Manama said if there was anybody who could say they were earning less money than they did from BKB they would be lying. After the situation was put under control, he went on to explain that it could be the LWC or the farmers' fault that the situation is at that. He added that some woolsheds have not submitted their paper work while others delivered the wool and mohair late. ’Mokhotlong Co-op brought the last batches of their products late hence some farmers have not been paid.

Liphamola woolshed only brought one batch of wool while Thabang woolshed has not brought its products to Thaba-Bosiu, hence they have not been paid', he said. He further noted that Moremoholo woolshed and others had their money transferred to their bank accounts but their respective banks could be the ones to blame. He assured all farmers that they will eventually get paid although he refused to commit himself about the time frame.

Visibly angry farmers responded with rage, saying this is the last year that they get robbed by LWC and they never want to see it or its staff again. One of them, Abinyane Tsilo said in 2017 he got around M20 000 for wool from 45 sheep but this year with 80 he got M13 000 which he said did not make sense. On the government's side, Matee Limo from the marketing department of the Ministry of Small Business indicated that the impasse can be solved through a meeting with the district committee where lists of farmers can be submitted and after their inspection for all faults be corrected.

Mr Limo also explained that some payments were delayed because a wool compressor broke down so the centre only managed to transport a limited number of bales. To compensate the farmers for the delay, Mr Limo said Stone Shi, the broker, is entitled to four percent of the sales but he intends to sacrifice it for the farmers. He also acknowledged that the matter is being politicised hence the fallout.

The wool and mohair industry contributes millions to the economy of Lesotho, and in most families in the highlands districts it is the primary source of income as many of these farmers are unemployed. It has been months now since the government introduced new regulations to regulate the wool and mohair industry ushering in the LWC, as the new broker after BKB has been accused of tax fraud while it insists it is being falsely accused.

Opposition parties have also been advocating for BKB, claiming it to be the best deal for farmers while government believes LWC is the one to go for. About 40 000 wool and mohair farmers in rural Lesotho have also accused Standard Lesotho Bank of aiding a broker who has been failing to pay them. The farmers – who have been clients of the bank for decades – say they were forced by the government of Lesotho to export their products through broker, Maseru Dawning. “We have been promised that farmers would get their proceeds at Standard Lesotho Bank but less than 25% of farmers are getting their money, and the money they are getting is far less than what they earned in the 2017/18 season, many are getting less than half of that,” said Mr Khotsang Moshoeshoe of the Lesotho Wool and Mohair Association.

For decades, the farmers could individually export their produce and many who were members of the Lesotho Wool and Mohair Association did that through South African broker BKB. BKB sent the wool and mohair to the Wool Exchange in Port Elizabeth, where it was tested for international standards, and fetched prices from bidders from around the world. Last year, the government of Lesotho introduced new regulations prohibiting brokers from exporting their produce and requiring them to register in Lesotho and set up warehouses. BKB was adamant this model would not work because Lesotho didn't have a testing bureau or an exchange. The only broker who was licensed was Maseru Dawning, which is owned by Chinese national Stone Shi.

The Lesotho wool and mohair industry generates R800 million annually, but the farmers who said they were usually paid promptly in the past, complained that only 30% of the proceeds from the sale of the wool and mohair had been paid since last year. Both the farmers and the broker are clients of Standard Lesotho Bank, and photos and videos of long queues of people waiting outside the bank to receive their money from Maseru Dawning have gone viral. The farmers said every week they get alerts from the government and the broker saying they have been paid, and they pay for public transport to go to Standard Lesotho Bank branches where they sometimes queue for days, only to be told that their money hasn't been deposited.

Mr Moshoeshoe said Standard Lesotho Bank was aware that Maseru Dawning was not above board. “Maseru Dawning, I suspect, is a company run by a fraudster and it’s defrauding Basotho because the total sum that they have paid to Basotho is less than 30% per individual per wool shed and per district. “The bank is quite silent because yesterday I got a phone call saying none of the people who are on the list are going to get money because Maseru Dawning has not given money to us.” He said the farmers were surprised that the bank had not taken action against Maseru Dawning. “The government of Lesotho has harmed Lesotho farmers in favour of Stone Shi, and Standard Bank has joined the fray in helping Stone Shi to defraud Basotho farmers."

In response, Standard Lesotho Bank said it was only a payment facilitator between clients and was sympathetic to the challenges of the farmers. It said it was beefing up capacity where payments were made manually. However, the bank would not comment on its assessment of Maseru Dawning’s financial standing. Hundreds of wool and mohair farmers who have for a long time awaited payment for submitting their produce at Thaba-Bosiu Centre were since last week seen queuing at the bank in Mokhotlong to receive their dues. Payments finally came after a long controversy involving government and the Wool Centre operator and the situation which has seen wool and mohair farmers go for extended periods without due payment for their fibre.

One of the farmers from Matlakeng Scheme in Mokhotlong, Realeboha Hopo, shared his frustrations. “I started going to the bank earlier this week after hearing an announcement over the local radio that we should go and check our names on the list provided to the bank to get paid as funds would be disbursed from Monday.” He said he conducts periodic shearing of goats and sheep in April and August respectively and he lamented he had only been paid a portion payment for the last year’s fibre. Mr Hopo further indicated that the farmers had expected things to turn around for the better as has been the promise when operations were removed from BKB and yet he lamented that he only got paid M6,000 out of the fibre of 40 sheep sheared last year alone while he expected at least M8,000.

He added that they were during the BKB tenure paid their dues on time and without fail and yet they are made to wait for a year before getting paid this time. He added that he has this year sheared 50 sheep and 15 goats and expects more proceeds yet he was reluctant to tender in his fibre to the wool centre for obvious reasons because he is not sure of what would happen next, saying he could only await his scheme leader’s guidance going forward. The delay in payment of the wool and mohair farmers has on the one hand negatively impacted their livelihoods as they depend on income generated from the fibre sales to feed their families, educate children and even purchase medication for their animals.

Several of them complained that they could not even feed their animal tenders deployed at various animal posts in the mountainous rural district which was shameful because they had to turn them back empty-handed whenever they came seeking for food to take to the posts. The chairperson of Cabinet Sub-Committee on wool and mohair issues Thesele ‘Maseribane meanwhile earlier this month assured wool and mohair farmers that they will receive their monies from May 13. He had directed farmers to visit Lesotho Post Bank (LPB) and Standard Lesotho Bank (SLB), holding their passports and national Identity Documents (IDs) and indicated an expectation to pay all farmers in 19 days.

Additional reporting by Lena and EWN

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